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Which Companies Are Winning The Cloud Services War?

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Which Companies Are Winning The Cloud Services War?

The cloud has emerged as the newest massive multi-billion-dollar growth frontier in the tech space. Now that the dust has completely settled on Q1, Goldman Sachs analyst Heather Bellini took a look back at which companies are dominating the cloud market and which companies are on the rise.

In terms of revenue, it’s no surprise that Amazon.com, Inc. (NASDAQ: AMZN) took the top spot in Q1. Amazon’s AWS has now generated $8.9 billion in revenue in the past year.

Microsoft Corporation (NASDAQ: MSFT) and salesforce.com, inc. (NYSE: CRM) are a distant second and third place with $1.8 billion and $1.1 billion in revenue, respectively.

In terms of accelerating cloud growth in Q1, Alibaba Group Holding Ltd (NYSE: BABA) was the big winner. Its Alicloud revenue growth accelerated to 162 percent year-over-year (Y/Y) in Q1 compared to 117 percent in Q4. Alibaba's 162 percent Q1 cloud growth was the largest of any cloud vendor.

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“Cloud computing in China lags the US by four years, but it will be one of the fastest growth areas within our China internet coverage,” Bellini explained.

Amazon and Microsoft’s cloud growth, while still impressive, decelerated in Q1 compared to Q4.

Goldman Sachs estimates that Microsoft, Alibaba and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) all gained cloud market share in Q1.

The firm has Buy ratings on Amazon, salesforce, Oracle Corporation (NYSE: ORCL), Alphabet and Alibaba.

Disclosure: The author is long BABA.

Latest Ratings for AMZN

DateFirmActionFromTo
Dec 2019AssumesBuy
Nov 2019Initiates Coverage OnHold
Oct 2019MaintainsMarket Outperform

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